UNEP/Ozl.Pro.WG.1/35/4

UNEP/OzL.Pro.WG.1/35/4

UNITED
NATIONS / EP
UNEP/OzL.Pro.WG.1/35/4
/ United Nations
Environment
Programme / Distr.: General
17 April 2015
Original: English

Open-ended Working Group of the Parties to
the Montreal Protocol on Substances that
Deplete the Ozone Layer

Thirty-fifth meeting

Bangkok, 22–24 April 2015

Item 7 of the provisional agenda[*]

Key issues for discussion towards a possible
hydrofluorocarbon management policy and
legal framework under the Montreal Protocol

Proposed amendment to the Montreal Protocol submitted by India

Note by the Secretariat

Pursuant to article 9, paragraph 2, of the Vienna Convention for the Protection of the OzoneLayer, the Secretariat is circulating a proposal submitted by India to amend the Montreal Protocol in respect of hydrofluorocarbon phase-down (seeannex). The proposal is being circulated as received and has not been formally edited by the Secretariat.

Annex

Indian Proposal for Amendment for Phase-down of Hydrofluorocarbons (HFCs)

1. Background:

HFCs have been widely used chemicals as substitute to Ozone Depleting Substances (ODSs). HFCs being non-ODSs are not controlled so far under the Vienna Convention for the Protection of the Ozone Layer and its Montreal Protocol on Substances that Deplete the Ozone Layer. However, emissions of HFCs are controlled along with other six Green House Gases (GHGs) under the United Nations Framework Convention for Climate Change (UNFCCC) and its Kyoto Protocol. Considering HFCs are high-Global Warming Potential (GWP) chemicals, there is a growing global concern with the increased use of HFCs. It is proposed to phase-down production and consumption of HFCs using expertise and institutions of the Montreal Protocol and continue to include HFCs within the scope of the UNFCCC and its Kyoto Protocol for accounting and reporting of emissions.

The amendment proposal for phase-down of HFCs takes into account challenges in phase-out of Hydrochlorofluorocarbons (HCFCs) in Article 5 Parties by incorporating flexibilities in terms of choice of alternative technologies and timeframe for transitioning from HFCs to safe, technically proven, energy-efficient, economically viable, environment friendly, commercially available low-GWP/zero-GWP technologies.

2. Key Elements of the Indian Proposal

(i) There are 19 HFCs with varying GWP from 4 to 12,400.

(ii) Emissions of HFC-23 and its by-production during production of HCFC-22 to be addressed on priority because of its high-GWP. Comprehensive Research and Development (R&D) efforts should be undertaken to convert HFC-23 into useful products.

(iii) New Annex F and Annex G shall be added to the Protocol following Annex E.

(iv) Nationally determined phase-down steps for HFCs in Article 5 Parties.

(v) Continue to use HCFCs/HFCs and blends of HFCs as transitional substances for phase-out of HCFCs wherever low-GWP/zero-GWP alternatives are not available.

(vi) Full conversion costs be defined as below :

The total cost of converting a chemical production plant from HFC(s) to low-GWP/zero-GWP alternative(s) and/or manufacturing unit of equipment(s)/product(s) from HFCs to low-GWP/zero-GWP alternative(s) including capital costs, costs of Intellectual Property Rights, patents, technology transfer, research and development, in-house development, lost profit due to shutdown/closure of plant/manufacturing facility, change in structure design, layout of plant and machinery, civil, electrical and mechanical works etc.

(vii) Strengthening of financial mechanism and transfer of technology under the Montreal Protocol by addressing the following :

(a) Compensation for lost profit streams for gradual closure of production facilities of HFCs.

(b) “Full conversion costs”:

(1) Converting a production plant of HFC to low-GWP/zero-GWP alternative production plant.

(2) Converting a manufacturing unit of equipment(s)/product(s) from HFCs to low-GWP/ zero-GWP alternative(s) and operating costs at least for 5 years.

(3) Adequate funding for servicing sector including training of technicians, awareness, equipment support to technicians, compensation for obsolescence/immature retirement of equipment etc..

(d) The amendment shall supersede earlier decisions/agreements if any related to Annex F and Annex G substances between the Parties and the Executive Committee or any other related institutions under the Montreal Protocol.

(viii) A grace period of 15 years for Article 5 Parties to ensure availability of safe, technically proven, energy-efficient, environment friendly, economically viable, commercially available, matured non-HFC technologies.

(ix) The baselines for non-Article 5 Parties for production and consumption should be the average of 2013-2015 with freeze in 2016 and for Article 5 Parties should be the average of 2028-2030 with freeze in 2031 and phase-down with a flexible approach to reach the plateau of 15% of the baseline in 2035 and 2050 respectively. Phase-down steps for Article 5 Parties shall be decided 5 years in advance for the next 5 years period.

(x) Date of freeze shall be the date of eligibility of enterprises for financial assistance in case of Article 5 Parties.

(xi) Prioritization of phase-down of Annex F substances recognizing that there are no alternatives for all HFC applications.

(xii) Annex F substances shall be categorized in the following Groups:

(a) Annex F–Group I: (HFC-134, HFC-134a, HFC-143, HFC-245fa, HFC-365mfc)

(b) Annex F – Group II: (HFC-227ea, HFC-236cb, HFC-236ea, HFC-236fa, HFC-245ca, HFC-43-10mee)

(d) Annex F – Group IV : (HFC-41, HFC-152, HFC-152a, HFC-161)

(xiii) Annex G substances : HFC-23 :-

(a) Phase-down of production and consumption of HFC-23, if any.

(b) Emissions of HFC-23 and its by-production during production of HCFC-22 to be addressed on priority because of its high-GWP. Comprehensive R&D efforts should be undertaken to make use HFC-23 for converting it in a useful product(s).

(xiv) Separate provisions for non-Article 5 and Article 5 Parties for phase-down of production and consumption of Annex F substances on group-wise prioritization on a GWP-weighted basis.

HFC Reduction Steps for Non-Article 5 and Article 5 Parties (%ofbaseline)

(xv) Use of GWP weighting for HFCs in the Montreal Protocol.

(xvi) Exemption for production and consumption of HFCs for manufacturing of Metered Dose Inhalers (MDIs) and other medical applications.

(xvii) Provision of Essential Use Nomination (EUN) both for non-Article 5 and Article 5 Parties.

(xviii) No control on feedstock applications of HFCs.

(xix) Requirement of licensing of HFC imports and exports, and bans imports and exports to non-Parties.

(xx) Requirement of reporting of HFC production, import and export of HFCs.

(xxi) Phase-down of production and consumption of HFCs shall be eligible for funding under the Montreal Protocol’s Multilateral Fund.

3. Relationship to HCFC phase-out:

Recognizing that HFCs are alternatives to HCFCs for various applications and there are no low-GWP/zero-GWP non-HFC alternatives for all the applications, it is proposed to continue the use of HFCs and blends of HFCs as transitional substances for phase-out of HCFCs wherever low-GWP/zero-GWP alternatives are not available.

4. Relationship with the UNFCCC:

(i) The proposal is intended to support overall global efforts aimed at climate system protection.

(ii) The proposal envisages continuance of inclusion of HFCs within the scope of the UNFCCC and its Kyoto Protocol for accounting and reporting of emissions.

Note: Above key elements shall form part of operating paragraphs of the decision on HFC amendment.

5. Text of Indian HFC phase-down amendment proposal

Article I: Amendment

A. Article 1, paragraph 4

In paragraph 4 of Article 1 of the Protocol, for the words:

“Annex C or Annex E”

there shall be substituted:

“Annex C, Annex E, Annex F or Annex G”

B. Article 1, paragraph 9

a new paragraph shall inserted after paragraph 8

9. “Full conversion costs” means the total cost of converting a chemical production plant from HFC(s) to low-GWP/zero-GWP alternative(s) and/or manufacturing unit of equipment(s)/product(s) from HFCs to low-GWP/zero-GWP alternative(s) including capital costs, costs of Intellectual Property Rights, patents, technology transfer, research and development, in-house development, lost profit due to shutdown/closure of plant/manufacturing facility, change in structure design, layout of plant and machinery, civil, electrical and mechanical works.

C. Article 2, paragraph 5

In paragraph 5 of Article 2 of the Protocol, for the words:

“and Article 2H”

there shall be substituted:

“Articles 2H, 2J and 2K”

D. Article 2, paragraphs 8(a) and 11

In paragraphs 8(a) and 11 of Article 2 of the Protocol, for the words:

“Articles 2A to 2I”

there shall be substituted:

“Articles 2A to 2K”.

E. Article 2, paragraph 9

The “and” at the end of subparagraph 9(a)(i) of Article 2 of the Protocol shall be moved to the end of subparagraph 9(a)(ii).

The following subparagraph shall be inserted after subparagraph 9(a)(ii) of Article 2 of the Protocol:

“(iii) Adjustments to the global warming potentials specified in Annexes C, F and G should be made and, if so, what the adjustments should be;”

In paragraph 9(c) of Article 2 of the Protocol, the following language shall be inserted immediately after the words “In taking such decisions”:

“under subparagraphs 9(a)(i) and (ii)”:

For the final semi-colon of paragraph 9(c) of Article 2 of the Protocol there shall be substituted:

“. In taking such decisions under subparagraph 9(a)(iii), the Parties shall reach agreement by consensus only; ”

F. Article 2J

The following Article shall be inserted after Article 2I of the Protocol:

“Article 2J: Hydrofluorocarbons

1. Each Party shall ensure that for the twelve-month period commencing on 1 January [2016], and in each 12-month period thereafter, its calculated level of consumption of the controlled substances in Annex F does not exceed, annually, [one hundred] per cent of the average of its calculated levels of consumption of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five percent of the baseline of Annex C, Group I controlled substances. Each Party producing one or more of these substances, shall, for the same period, ensure that its calculated level of production of the substances does not exceed annually [one hundred] per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances. However, in order to satisfy the basic domestic needs of the Parties operating under paragraph 1 of Article 5, its calculated level of production may exceed that limit by upto ten per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances.

2. Each Party shall ensure that for the twelve-month period commencing on 1 January [2018], and in each 12-month period thereafter, its calculated level of consumption of the controlled substances in Annex F does not exceed, annually, [ninety] per cent of the average of its calculated levels of consumption of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five percent of the baseline of Annex C, Group I controlled substances. Each Party producing one or more of these substances, shall, for the same period, ensure that its calculated level of production of the substances does not exceed annually [ninety] per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances. However, in order to satisfy the basic domestic needs of the Parties operating under paragraph 1 of Article 5, its calculated level of production may exceed that limit by upto ten per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances.

3. Each Party shall ensure that for the twelve-month period commencing on 1 January [2023], and in each 12-month period thereafter, its calculated level of consumption of the controlled substances in Annex F does not exceed, annually, [sixty five] per cent of the average of its calculated levels of consumption of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five percent of the baseline of Annex C, Group I controlled substances. Each Party producing one or more of these substances, shall, for the same period, ensure that its calculated level of production of the substances does not exceed annually [sixty five] per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances. However, in order to satisfy the basic domestic needs of the Parties operating under paragraph 1 of Article 5, its calculated level of production may exceed that limit by upto ten per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances.

4. Each Party shall ensure that for the twelve-month period commencing on 1 January [2029], and in each 12-month period thereafter, its calculated level of consumption of the controlled substances in Annex F does not exceed, annually, [thirty] per cent of the average of its calculated levels of consumption of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five percent of the baseline of Annex C, Group I controlled substances. Each Party producing one or more of these substances, shall, for the same period, ensure that its calculated level of production of the substances does not exceed annually [thirty] per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances. However, in order to satisfy the basic domestic needs of the Parties operating under paragraph 1 of Article 5, its calculated level of production may exceed that limit by upto ten per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances.

5. Each Party shall ensure that for the twelve-month period commencing on 1 January [2035], and in each 12-month period thereafter, its calculated level of consumption of the controlled substances in Annex F does not exceed, annually, [fifteen] per cent of the average of its calculated levels of consumption of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five percent of the baseline of Annex C, Group I controlled substances. Each Party producing one or more of these substances, shall, for the same period, ensure that its calculated level of production of the substances does not exceed annually [fifteen] per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances. However, in order to satisfy the basic domestic needs of the Parties operating under paragraph 1 of Article 5, its calculated level of production may exceed that limit by upto ten per cent of the average of its calculated level of production of Annex F controlled substances for the years 2013, 2014 and 2015 plus twenty five per cent of the baseline of Annex C Group I controlled substances.